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Consumption taxes are regressive—that is, they fall much harder on the poor than they do the rich, because the poor spend a larger proportion of their incomes just to get by.

Kicking our Coke Habit

By Tom Philpott

Coca-Cola is artificially blackened water goosed with high-fructose corn syrup: in short, a lavishly marketed jolt of liquid sweetener, likely as habit-forming and health-ruining as a Marlboro. So why not slap a special tax on it and other sugary drinks, in hopes of reducing consumption?

A host of U.S. cities have taken the plunge. Berkeley, Calif., rolled out a penny-per-ounce levy on distributors of sweetener-heavy drinks in 2015. Since then, Oakland, Calif.; San Francisco; Albany, Calif.; Philadelphia; Boulder, Colo.; and Seattle have followed with similar initiatives. Cook County, Ill., which contains Chicago, dabbled in a soda tax, passing one in November 2016 only to dismantle it under pressure from the beverage industry.

The obvious objection—beyond lost profits for Big Soda—is fairness. Consumption taxes are regressive—that is, they fall much harder on the poor than they do the rich, because the poor spend a larger proportion of their incomes just to get by. And soda taxes are particularly laser-focused on the low end of the income scale because, as research suggests, the less money you make and the less education you’ve attained, the more soda you consume.

But soda’s dossier as a public health menace is gaining weight, so to speak. A long line of population studies convincingly links soda consumption with Type 2 diabetes, an increasingly common malady that can trigger everything from kidney damage to poor vision. And like soda consumption, Type 2 diabetes rates are inversely correlated to income.

And soda may be a key trigger. In a blockbuster 2016 study, Swedish researchers tracked the dietary habits and health outcomes of more than 2,800 adults over several years, adjusting their results for a range of factors like age, gender, family history of diabetes and caloric intake. They found that people who quaff around a soda per day are twice as likely to develop Type 2 diabetes as those who abstain. And people who drink just under three sodas per day had a 10 times higher risk of developing Type 2 diabetes.

As a result of this and other ill effects, such as increased risks of obesity and tooth decay, the World Health Organization’s conditional recommendation is that adults and kids limit added sugar intake to 5 percent of daily calories—about 25 grams of sugar. That leaves no room for a daily 12-ounce Coke, which delivers 39 grams.

So, while soda taxes hit low-income people harder in the pocketbook, they might also disproportionately boost their health—that is, if they actually reduce consumption. The industry, apparently, thinks they do. In 2016, Coca-Cola Co., PepsiCo and their trade group, the American Beverage Association, spent a combined $37.7 million in failed efforts to beat tax initiatives in three California cities and Boulder.

Research, while still pretty spotty because soda taxes are new, is bearing this out. A 2017 paper in the peer-reviewed Journal of Nutrition looked at Mexico, which implemented a soda tax in 2014. It found that soda purchases dropped 6.3 percent in the year after the tax’s debut, with an even larger reduction “among lower-income households, residents living in urban areas and households with children.” Bottled water sales, meanwhile, jumped 16.2 percent.

A similar study in Berkeley also delivered bitter news to Big Soda. In the first four months after implementation, soda sales plunged 21 percent in low-income Berkeley neighborhoods while increasing 4 percent in comparable areas of nearby Oakland and San Francisco, which then had no such tax. Water consumption, meanwhile, jumped 63 percent.

Preliminary results in Philadelphia, where a 1.5-cents-per-ounce tax took effect Jan. 1, 2017, look even more robust: In the first half of the year, soda sales plunged 57 percent by volume—without affecting overall business at chain stores, according to preliminary results from a team of researchers from Harvard, University of Pennsylvania and Johns Hopkins. Of course, none of these studies tell us whether the drops in consumption are permanent or even real—residents may be streaming across town borders to snag untaxed drinks. But the initial research, and the soda industry’s fierce opposition, hint at success.

What about economic justice? If the studies are correct, these taxes are successfully forcing low-income soda fanciers to either forgo a creature comfort or pay extra for it. One way to make up for that squeeze would be to channel the proceeds into initiatives that benefit the poor.

San Francisco, Oakland and Berkeley have vowed to use the funds to support health-related initiatives, while Philadelphia has earmarked its soda tax proceeds for pre-K programs, community schools and improvements to the city’s parks, libraries and recreation centers.

Ultimately, these taxes can only be judged a success for low-income Americans if they help end the scourge of diabetes and other sugar-related maladies. We’re a long way from knowing whether they do, but the effort seems worth the gamble.

There's No Sugar-Coating a Regressive Tax

By Max B. Sawicky

Tom lays out the issues well, but I see some gaps.

I am happy to accept the research Tom cites: that excessive consumption of high-sugar drinks has negative health effects, and a tax discourages such consumption. This doesn’t mean the tax is a good idea.

Tom is right in acknowledging that the tax will be regressive because, on average, low-income people spend a higher proportion of their earnings on sugary drinks. He argues that this is balanced by the health benefits they may reap.

But consider how this plays out in practice. Under a soda tax, consumers of high-sugar drinks fall into two groups: those who buy less soda and may realize some health benefits, and those who do not.

For the refuseniks, or soda addicts, the tax amounts to a simple penalty for being who they are. This, I submit, is an ethically obnoxious result, even for a well-meaning policy. You could say it’s for the greater good, but progressives would prefer not to rest the burden on those least able to bear it.

Tom’s other remedy is for the proceeds of the tax to be used to aid the poor. On its own terms, this doesn’t quite solve the problem. The penalized group may not come out of such an exercise whole, since some members won’t necessarily realize any personal health benefits.

And remember, we’re talking about municipal governments. In actuality, not theory, how likely is it that a new revenue source would flow to its announced objective? This hope lends too much credit to both the competence and commitment of local politicians and administrators.

I concede that local (and state) governments are under severe fiscal stress. Given this, most any revenue generator is a good one, and local progressive taxation is difficult to implement because a progressive municipal income tax is easy to avoid by moving.

But a soda tax is a micro solution to a macro problem. The purveyance of teaspoon remedies is a hallmark of Clinton/Obama public policy (with some notable exceptions), and soda taxes are essentially neoliberalism at the municipal level: small-scale solutions to large problems relying on undependable market mechanisms. Is whatever revenue they provide really going to solve the enormous disinvestment in black and brown communities?

But the real knock on the soda tax is that the conversation it generates—the policy oxygen it consumes—far exceeds its relevance to the oppression of people of color in local communities.

Soda taxation is a very meager substitute for a serious discussion of urban policy, or of economic policy responses to institutional racism. If our concern is revenue for local governments, we need to talk about federal and state aid, financed by broad-based taxes. If our concern is public health, imagine how low-income communities would benefit from an expanded network of community health clinics, as has been proposed by Bernie Sanders and James Clyburn. Or consider the changes in behavior—including consumption of sugar drinks—that follow from reductions in inequality and increases in living standards. When people have more money to spend, healthier food becomes more accessible.

There is also a political consideration. The liberal interest in regulating legal if unwise personal behavior may appeal more to the do-gooder class than to its beneficiaries, when all the votes are counted. Right-wing narratives exploit stories about well-off liberals enacting laws or regulations constraining personal behavior. A soda tax is a small thing, but it feeds into a larger theme on the Right.

I’m writing this from rural Virginia, an open-carry state. We’re not looking at soda taxes around here. But we just enjoyed a serious electoral thumping delivered to Trumpism—really to the Republican Party—in what most thought was an unlikely place.

Say I, it’s time to think bigger, people.

Regulate Corporations, Not People

By Melina Packer

The United States has a long and offensive history of imposing Western/Euro-American dietary norms on racialized “others” and economically marginalized whites. In the late 19th century, for example, dietary reformers codified the white middle class’s standardized diet—milk, bread, meat, salad—as the one and only “scientifically proven” healthy diet, dismissing centuries of diverse religious and cultural foodways, not to mention lactose intolerance. Today it is the Mediterranean diet that is revered by nutritionists, implicitly labeling other culinary traditions as inferior. In the context of this history (and its contemporary expression), soda taxes leave a really bad taste in my mouth.

I agree with Tom that drinking fewer sodas is probably better for everybody (except, perhaps, certain corporate executives), and I believe in fair, redistributive taxation to fund strong social safety nets. But as Max emphasizes, soda taxes as a revenue scheme may be both insulting and ineffective. Given the United States’ troubled legacy of targeted dietary reforms, as well as the unexamined assumptions embedded in dominant justifications, I am decidedly against soda taxes.

One faulty assumption, so common that it underlies nearly all scientific and journalistic analyses, is that people earning lower incomes make “poorer” dietary choices than those with more money. This claim remains unsupported by national surveys. All income brackets and races/ethnicities in the U.S. self-report consuming approximately the same amounts and types of calories, with middle-income people frequenting fast food establishments the most. Even if, on average, lower income people consume more soda, I question this narrow framing of sugar intake. Surely artisanal, small-batch cider or ice cream (or craft soda!) also contain excess sugar, but no public campaign surveils and shames foodies for their bespoke drinks and desserts.

The idea that somebody’s diet should be policed simply because she has less money in her wallet, or more weight on her body, is highly problematic. Soda tax campaigns almost always conflate weight and health, invoking the so-called obesity epidemic as if heavy necessarily means unhealthy. They also tend to conflate race and class, claiming to be especially concerned for (read: rescuing) people of color, as if being Black or Brown necessarily means “needing help from above.”

A second flawed assumption is that lower-income people’s disproportionate burden of Type 2 diabetes is caused by soda. Even studies that do find correlations between soda consumption and Type 2 diabetes are framing “the problem” (and, in turn, “the solution”) such that all other potential causes (and solutions) are cropped out.

I do not dispute the fact that poorer people tend to have worse health outcomes. What I do take issue with is the myopic focus on individual diets rather than structural preconditions. Mounting evidence in the science of environmental epigenetics demonstrates that exposure to trauma—be it famines, toxins or discriminations—produces harmful, inheritable health effects. Endocrine-disrupting chemicals in particular (e.g., BPA in plastics—do we really want to celebrate more bottled water purchases?) detrimentally distort the body’s metabolic processes, resulting in such diseases as—you guessed it—Type 2 diabetes. Chronic stress and irregular circadian rhythms are also increasingly understood to wreak havoc on our endocrine systems, causing major metabolic dysfunction. Since people earning lower incomes in this country tend also 1) to be segregated into highly toxic neighborhoods, whether beside a coal mine, a chemical refinery or a concentrated animal feeding operation, and 2) to have precarious employment that produces chronic stress and forces irregular sleep, then lower-income populations’ higher incidence of Type 2 diabetes may have much more to do with their disproportionate exposure to toxins and job insecurity, rather than with the small, well-deserved pleasure a sip of sweet soda might provide.

Stigmatizing and taxing people for drinking soda both distracts from the (far worse) industrial production of toxic exposures and alienates potential allies in the paramount battle against the real threat: corporate power. (After all, if everyone simply switches from Coke to Dasani, Coca-Cola Co. still wins, and people and the planet still lose.) We cannot spare our precious time and resources on soda taxes—of all things!—when living wages, affordable healthcare, and safe and clean workplaces, homes and neighborhoods are far more urgent concerns. Public health advocates should refocus their energies on stronger corporate regulations, relieving the downward pressure on wages, prohibiting offshore tax havens and preventing chemical intoxication of our environments, among other issues.

Promoting public health means supporting all people’s right to prepare pleasurable meals on their own terms, which requires reining in the corporations that are corrupting our government, poisoning our planet and quite seriously threatening our lives.